In today’s data-driven world, companies are amassing more data than ever before. These unique data assets are proving valuable for analytics, modeling and targeting purposes.
But now, many companies are wondering if others would find value in their data … and be willing to pay for it.
A previously untapped opportunity, the concept of data monetization is becoming a priority for companies whose main business model has historically had little or nothing to do with selling data.
Airlines, retailers and telco providers may not rely on data sales to pay their bills today, however, it is quickly becoming an additional revenue stream proving worthy of their time and energy.
Data Monetization in Action
Let’s take a look at a common example of what companies are going through today. In this scenario, we have a parenting magazine publisher. It is in the business of creating content, growing subscriptions, and selling ad space within their publication.
However, while operating its core business, the publisher collects quite a bit of data. In this case, the publisher’s data not only includes parents, but through surveys and site activity may also include additional information like whether or not those parents plan large family vacations each year.
Wouldn’t this data be extremely valuable to a company that books airfare, hotels or family vacations?
Endless Use Cases
Or think about a sporting goods store. Its primary business is to sell athletic apparel, sports equipment and gear.
With a strong loyalty program, the retailer collects data on who is purchasing basketball specific equipment and team apparel. Wouldn’t this data be useful to a cable provider who is looking to upsell a NBA package to subscribers?
The use cases are endless.
Nearly every brand has access to data that could be of value to another company in a complimentary vertical. The concept of sharing data and profiting from it has risen in popularity recently for two reasons: supply and demand.
The Key Is Data Analysis
In terms of supply, there is currently an overabundance of data being collected. As for demand, brands are anxious to get their hands on new data that could gain them a competitive edge, while also helping them deliver the personalized communication people now expect.
When a company starts to consider whether or not their data is something that could be monetized they need to work with a data onboarding or activation partner.
Since most data is of sensitive nature it is important that the selected partner has demonstrated privacy compliance. It also has to demonstrate its linkage, matching and distribution capabilities.
Your selected partner should be able to connect and distribute your audience to wherever you want to sell it across channels. When evaluating a data monetization partner, you should also ensure that they have the media partnerships and a wide network of distribution end points so you can maximize your efforts.
Take a Data Inventory
So you’ve decided to move forward with the process of turning your data in dollars. What’s the first thing your data onboarding or activation partner will do? Take inventory.
Depending on your data fluency, you may already have your data segments packaged up. It’s also very likely you may have a pile of rich information, perhaps data collected from your website, but you’ve yet to enrich and analyze it, and therefore have no idea what to do with it.
Either way, your partner should work with you to not only better understand your data, but also make audience recommendations based on market demand, pricing, segment sizes and privacy compliance standards.
This discovery process will give your partner a better understanding of data fluency and data sophistication and help you determine how much your data could be worth.
Maximize Your Data ROI
If you are looking to enter this competitive space, there are certain things that you can do to maximize your returns:
Create accurate audiences that scale
To be successful at selling your data, you must strike the right balance between granularity and scale. You want your audience segment, whether it is originally sourced or modeled, to be accurate and perform well.
For example, if you are the publisher we talked about earlier and want to create an audience of “parents who love to go on family cruises,” you may have that information on 10,000 people.
Yes, it will probably perform very well for the travel company targeting that audience, but the scale is limited and may not be worth their time to purchase in the first place. In that case, you need to ramp up your audience size to something more scalable — hundreds of thousands if not millions of people in an audience segment.
To maintain the value of your data and ensure its performance power isn’t diluted, you’ll want to ensure your monetization partner has the data, perhaps hundreds of additional attributes that can be added to the modeling recipe.
Maintain data freshness and relevancy
The fresher the data, the bigger the reward. There are many advertisers who are thirsty for time-sensitive data.
And depending on the type of data you are looking to monetize, you may be able to fill that need.
Perhaps a finance company would like to reach users who have been viewing homes on a real estate website as they may be likely to be making an investment shortly. Ensure that your partner has the ability to quickly ingest, segment, link and distribute your data so you can reap the benefits.
Quality linkage is key
What does linkage mean? In this case, we’re referring to the data that your partner is using to connect your audiences to data marketplaces.
Just as it’s important for you to create accurate audiences, it is just as important for your monetization partner to have a foundation of quality linkage data.
Despite your audience being comprised of quality data, if your partner’s data is dirty, stale or incomplete, you will suffer the consequences. You will onboard fewer individuals in an audience, and ultimately leave money on the table.
Price based on channel and demand
Pricing always seems to be the part of the process people like best. They see dollar signs and begin thinking about just how much money they may be able to make.
However, pricing your data appropriately requires channel knowledge and experience to ensure a competitive approach.
A common myth in data monetization is that the same pricing model and dollar amount can simply translate from one channel to the next. For example, many people try to take their digital audiences and CPMs and apply them to the addressable TV space.
These channels, however, are planned, purchased, priced and deployed completed differently. This means you could end up once again leaving dollars on the table. And if you go it alone, you may also end up losing your negotiating and pricing power as soon as other partners and advertiser realize you don’t understand the nuances of a particular channel.
With the right partner, you can avoid these hurdles.
Data: A Valuable Asset
Whether you’re acquiring, selling, or using it, data is a valuable asset for all companies.
In fact, at the World Economic Forum’s annual meeting in Switzerland, “data” has been classified as its own asset class.
If you’re ready to turn that mountain of assets into a flowing stream of revenue, then it’s time to find a partner to help you take advantage of the market opportunity — one who can help you uncover the true value of your data, create meaningful audiences, distribute them wherever you’d like across channels, and turn your data into dollars.
Title image by Alberto Roldán